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2013 Supreme(Del) 1405
High Court of Delhi
S. MURALIDHAR, J.
Wealth Estate Pvt. Ltd.
Versus
K. Chandra & Another
CS (OS) No. 1994 of 2012
Decided on : 25-10-2013
For the Plaintiff:Jayant K. Mehta with Ms. Roopa Dayal, Advocates.
For the Defendants:Jayant Tripathi with Arjun Mitra, Advocates.
The main legal point established in the judgment is that the terms of a registered document cannot be varied by oral evidence, and no oral evidence can be led to contradict the terms of the document.
Headnote:
Sham Transaction - Property Dispute - Arbitration and Conciliation Act, 1996, Section 8 - Order XXXIX Rule 1 and 2 CPC - Order I Rule 10 CPC - Order VIII Rule 1A CPC
Fact of the Case:
The case involves a dispute over the possession of a property between Wealth Estate Pvt. Ltd. and K. Chandra and Madras Finvest Pvt. Ltd. The property was subject to an Agreement to Sell and a subsequent sale deed, and the defendants failed to vacate the property as per the terms of the agreements.
Finding of the Court:
The court found that the registered sale deed in favor of the plaintiff was valid and binding, rejecting the defendants' claim that the transaction was a sham and bogus document. The court directed the defendants to hand over vacant and peaceful possession of the property to the plaintiff.
Issues: The main issues revolved around the validity of the sale deed, the possession of the property, and the involvement of a third party in the dispute.
Ratio Decidendi: The court held that the terms of a registered document cannot be varied by oral evidence, and no oral evidence can be led to contradict the terms of the document. The court also found that the arbitration clause did not bind Defendant No.1, and further orders regarding arbitration were deferred until the plaintiff was put in vacant and peaceful possession of the property.
Final Decision: The court allowed the plaintiff's application for possession, permitted the defendant to file additional documents, and dismissed the application for impleadment of a third party. The court directed the defendants to hand over possession of the property to the plaintiff and deferred further orders on arbitration.
1. Before dealing with the applications, the background events may be noted.
2. The present suit has been filed by Wealth Estate Pvt. Ltd. (‘WEPL’) against K. Chandra (Defendant No. 1) and Madras Finvest Pvt. Ltd. (Defendant No. 2) for recovery of vacant possession of the property at A- 32, Diplomatic Enclave Extension, Cooperative Housing Building Society Limited, Westend Colony, New Delhi (hereafter referred to as ‘the suit property’) from Defendant No. 2.
3. An Agreement to Sell was executed on 10th September 2009 between Defendant No.2 and SICPA India Private Limited (‘SICPA’) whereby Defendant No. 2 agreed to sell to SICPA the suit property for a total consideration of Rs. 55 crores.
4. The recitals in the Agreement to Sell stated that Defendant No. 2 was the sole and absolute owner of the suit property and had mortgaged it in favour of the Bank of India (‘BoI’) on account of certain credit facilities extended to another company, Mascon Global Limited (MGL) and as on 31st July 2009 a sum of Rs.31,08,72,842/- was payable by MGL to BoI. The recitals further stated that an agreement was entered into between the parties thatSICPA would pay off the outstanding amount of Rs. 32 crores to BoI and that would be adjusted against the sale consideration.
5. The recitals noted that the suit property had been given on lease to Defendant No.1 through Defendant No.2 under a rent deed dated 14th October 2008 which had already expired on 28th February 2009 and Defendant No.1 was occupying the premises on a month to month tenancy. The recitals further stated that it had been agreed between the parties that Defendant No.1 would execute a license agreement for another eleven months with Defendant No.2 as well as SICPA and that a confirmation to this agreement by Defendant No.1 by a letter dated 5th September 2009 had duly been given.
6. The agreement listed out the manner in which the payment would be made by SICPA to Defendant No.2 and that simultaneous with the payment of the balance sale consideration, the Defendant No.2 will hand over physical, vacant, lawful, peaceful possession of the suit property to SICPA. The sale deed was to be executed within twelve months of the date of the agreement.
7. Under Clause 3(v), the balance sale consideration of Rs. 7 crores was to be paid on the happening of last of the following events provided that they happened within twelve months from the date of the agreement:
(a) Receipt by SICPA of a letter from the Mortgagee Bank confirming no dues against the Said Credit Facilities;
(b) Form 17 for the satisfaction of charge of the Mortgagee Bank over the said Property for the Said Credit Facilities duly filed by MFPL and an acknowledgment of such filing is received by SICPA;
(c) Receipt by SICPA of a sale deed duly executed and registered by MFPL for the conveyance/sale/demise of the said Property in favour of the SICPA (the “Sale Deed”) along with lawful, peaceful, vacant and physical possession of the said Property.
8. Under Clause 8 of the Agreement, it was recorded that the Defendant No. 2 would have no objection if SICPA transfers its right, title and interest in favour of any third party. However, it was agreed that such right would accrue only after expiry of twelve months after the Agreement. Defendant No.2 undertook that “it shall abide by the transfer contemplated in this clause and shall complete the transaction contemplated herein in favour of any such transferee/third party in whose favour SICPA transfers the right, title and interest arising out of this agreement as if such transferee/third party has replaced SICPA in this agreement/GPA/any other document executed for giving effect to this agreement”. The disputes arising out of the Agreement were agreed to be referred to arbitration under the Arbitration and Conciliation Act, 1996 (‘Act’).
9. On 18th September 2009 a leave and license agreement (L&L Agreement) was entered into between Defendant No. 2 (described as the ‘Licensor’) a
